Price Check On Fireball

Oregon voters will soon be told getting rid of the OLCC will lower liquor prices. A shopping trip to Vancouver kills that buzz.

Forget free-market dogma and protecting the little guy: We
just want to know whether getting government out of the liquor business
will save us money.

It’s a key question
facing Oregon voters as large grocers and big-box retailers push
initiatives onto the 2014 ballot aimed at dissolving the Oregon Liquor
Control Commission, the state agency that has monopolized the sale and
distribution of spirits here since the end of Prohibition.

The debate in Oregon
over the OLCC has been going on a long time. But last week, a group
called Oregonians for Competition filed five initiatives that closely
resemble Washington state Measure 1183, which voters approved in 2011,
ending state control of liquor sales there.

That campaign spent
an epic $22 million—financed almost entirely by Costco. The opposition
spent more than $10 million, making it the most expensive initiative
campaign in the state’s history. Voters passed the measure with a 59
percent majority.

The pro-1183 campaign argued that the measure would bring down liquor prices. But that wasn’t the case.

Seven months after 1183 went into effect, WW reported OLCC border stores such as those in Jantzen Beach and Rainier had seen huge spikes in sales (“Driving to Drink,” WW,
Dec. 12, 2012). And a year later, the OLCC says sales in its 12 border
stores still remain about 30 percent higher than they were pre-1183.

We compared seven of Oregon’s top-selling liquors and found they cost 27 percent more in Washington than they would have at an OLCC store.

With the new initiatives filed, WW
decided to investigate further. We asked the OLCC for its most popular
products and took our list of seven top-selling items across the
Columbia River to Vancouver, where we split up our shopping among three
big retailers.

In Washington, we paid $168.06.

The same liquor in Oregon would have cost us $132.65.

We found a wide
variety in shelf prices, but most of the bottles at two of the stores,
Fred Meyer and Safeway, were already priced higher than those at OLCC
stores.

Both Safeway and Fred
Meyer offered discounts—the clerk at Safeway knocked $11.40 off our
purchase even after we declined to sign up for a club card.

But despite the
discounts, the Washington booze was still pricier at checkout.
Washington has imposed two big taxes on liquor at the cash register: a
20.5 percent sales tax, and a per-liter tax that works out to a flat
$2.83 on each 750 ml bottle we bought.

And we could have
paid more. Depending on how we split up our purchases, the same basket
of booze at these stores could have cost us between $169.75 and $224.58.

The best prices were
at BevMo!, a California-based liquor chain famous for its well-lit,
aesthetically friendly stores with quotes on its walls extolling
drinking from such sources as Thomas Jefferson, John Maynard Keynes and
Ecclesiastes.

BevMo! beat the
OLCC’s shelf prices for five out of seven products, but the Washington
taxes taken at the till wiped out the savings.

Pat McCormick, a
spokesman for Oregonians for Competition, says the campaign will focus
on arguments other than lower liquor prices, including customer
convenience, introducing competition, and eliminating the government
agency go-between.

“I’m not trying to predict prices,” he says. “We’ve learned from the Washington process.”

Paul
Romain, a lobbyist for the Oregon Beer & Wine Distributors
Association, which opposes the initiatives to shut down the OLCC, says
the price issue should be a campaign focus. The Washington case, he
says, should give Oregon voters pause.

“When they ran ads,
they said prices would fall,” Romain says. “But you can’t do that
without eliminating the state’s take. Needless to say, that didn’t
happen.”

"In the low usage areas, we found that our vehicles sit idle four times longer, ultimately affecting overall vehicle availability for the Portland membership base, as well as parking for the Portland community."

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